(Pension Future Forum Statement. On the OECD Income Replacement Rate Standard) The Public Pension Strengthening People’s Action Must State Its Position on the MBN Report! (October 11, 2026)

The Public Pension Strengthening People’s Action’s

Secretary-General Oh Jong-heon

emphasizes in the attached MBN TV news interview

that, by OECD standards, the 42.5% income replacement rate of Korea's National Pension

is a distorted statistic

(a bogus statistic).

Following the OECD calculation standard,

the income replacement rate of Korea's National Pension

is not 42.5% but 31.2%,

and even with the Basic Pension included,

it comes to only around 35.1%, according to Oh.

In other words, on the grounds that the OECD calculates the income replacement rate based on the average earnings of all workers—unlike Korea's method, which calculates the National Pension income replacement rate based on the average income of National Pension contributors (A)—Oh stresses that the National Pension income replacement rate figure has been distorted.

The Pension Future Forum now puts the following question publicly.

Among OECD member countries, almost none other than the United States operates a contributory pension system with a built-in income redistribution function, as Korea does. This means that most OECD member countries operate 100% earnings-related pensions.

The problem with Korea's National Pension income replacement rate raised by the Public Pension Strengthening People’s Action is one that could easily be solved by converting the current National Pension into a 100% earnings-related pension, like those of other OECD member countries.

That is, the National Pension income replacement rate for all income groups would become 43%. Add the Basic Pension, and it would easily exceed 45%.

The easiest and clearest way to faithfully follow the position of the Public Pension Strengthening People’s Action, which has long argued for raising the National Pension income replacement rate, is

to take the current National Pension,

remove its income redistribution function,

and convert it into a 100%

earnings-related pension.

For a long time now, the Pension Future Forum

has stressed the need for structural reform: converting the National Pension into a 100% earnings-related pension, and turning the Basic Pension, now operated on a quasi-universal basis, into a scheme that pays larger benefits concentrated on vulnerable groups.

The Public Pension Strengthening People’s Action claims that by OECD standards the National Pension income replacement rate drops to 31%. If the concern behind that claim is to normalize the National Pension income replacement rate, there is no longer any reason to oppose a structural reform that converts the National Pension into an earnings-related pension.

We demand that, regarding the conversion of the National Pension

into a 100% earnings-related pension

through structural reform,

the Public Pension Strengthening People’s Action

state its position.

Fortunately, the Special Committee on Pension Reform of the 22nd National Assembly,

launched for the structural reform of the National Pension,

is scheduled to operate until the end of 2026.

We ask the Public Pension Strengthening People’s Action to state its position promptly

so that productive discussion in the National Assembly Special Committee on Pension Reform

can take place,

and we request its cooperation to that end.

(The MBN news broadcast aired on November 3, 2023.)